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Ferus plans small-scale British Columbia LNG facility to serve Yukon, NW Territories

Calgary (Platts)--20 Mar 2017 506 pm EDT/2106 GMT


Ferus is in the early stages of developing a merchant LNG facility in British Columbia to supply natural gas for mining companies in Yukon and the Northwest Territories to replace diesel they use for operations and for power generation, a spokeswoman said Monday.

A merchant LNG facility is a small-scale plant that is typically not owned by a utility and with a capacity of between 50,000 gallons/day (about 29,000 mt/year or 4.13 MMcf/d) and 500,000 gal/d.

"Our proposed Fort Nelson LNG facility consists of two phases each of 300,000 gal/d with a targeted final investment decision in 12 to 18 months," the spokeswoman, Blaire Lancaster, said in an e-mail.

Calgary-based Ferus has not yet started the regulatory process to build the facility, but the first phase is targeted for start up in 2020. The second phase is due for commission in 2022, Lancaster said.

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Last fall, Vancouver-based Casino Mining Corp. and Selwyn Chihong Mining signed a memorandum of understanding with Ferus for LNG supplies to their mine projects in Yukon and the NWT.

Besides reducing greenhouse gas emissions by nearly 30%, the LNG to be supplied from North Nelson will have a delivered price of "just less than C$15/gigajoule ($11.22/GJ) and this is compared with a price of C$27.12/GJ for diesel," she said.

The heat content for a gallon of LNG is 83,000 Btu, compared with 140,000 Btu for a gallon of diesel.

Ferus will supply the gas after compression in either trucks or in rail cars, Lancaster said.

In neighboring Alberta, where Ferus owns and operates a 50,000 gal/d merchant LNG at Elmworth, a second phase development is planned to be operational in 2018, she said.

Output from the Elmworth facility is currently supplied to the oil and gas industry in Western Canada to displace diesel in drilling rigs and fracking operations and power generation in Yukon and the NWT, Lancaster said.


EXPANDING US OPERATIONS


In the US, Ferus-owned Maxville LNG is due to start by the summer a liquefaction facility at Jacksonville in Florida with a 1 million-gal storage tank and an LNG truck-loading system, she said.

With a nameplate capacity of 200,000 gal/d, the project will have an output of 87,000 gal/d at the initial stage and will serve nearby island markets, Lancaster said.

Another Ferus-owned subsidiary, Eagle LNG, is building a fuel depot dockside at Talleyrand on the St John's River in Florida. The terminal, which is due to be operational this summer, will have a 500,000gallon storage capacity for bunkering operations, she said.

The Maxville liquefaction facility and Talleyrand have Crowley Maritime Corp as the anchor customers, Lancaster said.

Crowley transports cargo from the US to Puerto Rico in its own vessels.

Separately, a second liquefaction facility proposed by Eagle LNG is also planned at Jacksonville that is currently undergoing a Federal Energy Regulatory Commission process.

"We filed the application on January 31 and anticipate completion of the project in 2019," Lancaster said.

The proposed facility will have processing capacity of 1.5 million gal/d, with an on-site LNG storage of 12 million gallons and output from the project will be sold to the Caribbean to replace diesel that is used for power generation.

--Ashok Dutta, newsdesk@spglobal.com

--Edited by Alisdair Bowles, alisdair.bowles@spglobal.com

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